Fact Pattern 27-2A

question 8

Multiple Choice

Fact Pattern 27-2A
Ruth opens an account with State Bank under an agreement in which the bank reserves the right to charge the account for any item returned due to its unau?thorized alteration.
-Refer to Fact Pattern 27-2A. Tom deposits an altered check in Ruth's ac?count. When Unity Bank, the check's drawee bank, re?turns the item due to its alteration, State Bank files a suit against Ruth to recover the amount. The court is most likely to rule that

• A) Ruth does not have to pay, because she did not indorse the check.
• B) State Bank is entitled to recover under its account agreement.
• C) Tom is the party from whom State Bank should seek recovery.
• D) Unity Bank is the party from whom State Bank should seek recovery.

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Definitions:

Opportunity Cost

The advantage lost by selecting one option instead of another.

Full-tuition Scholarships

Financial awards covering the entire cost of tuition for students, often based on academic merit, need, or other criteria, provided by educational institutions or donors.

Comparative Advantage

The ability of a country or individual to produce a particular good or service at a lower opportunity cost than others, leading to more efficient international trade.

Specialize

Focusing one’s efforts in a specific domain or area of expertise, often to increase efficiency and skill.